Hoffman v. Vulcan Materials Co.

• Decision Date: 04 September 1998
• Docket Number: No. 1:98CV00152.,1:98CV00152.
• Citation: 19 F.Supp.2d 475
• Court: U.S. District Court — Middle District of North Carolina
• Parties: Molly Black HOFFMAN, Marty Butler, Roland Ezelle Estridge, Raymond Tarlton, Mary Louise Tarlton, William Clyde Thompson, Myrtle McDonald Thompson, Reid Garrison, Delores Ann Garrison, Joel M. Meggs, and Rachel Pemberton Plaintiffs, v. VULCAN MATERIALS COMPANY, Defendant.

19 F.Supp.2d 475

Molly Black HOFFMAN, Marty Butler, Roland Ezelle Estridge, Raymond Tarlton, Mary Louise Tarlton, William Clyde Thompson, Myrtle McDonald Thompson, Reid Garrison, Delores Ann Garrison, Joel M. Meggs, and Rachel Pemberton Plaintiffs, v. VULCAN MATERIALS COMPANY, Defendant.

No. 1:98CV00152.

United States District Court, M.D. North Carolina.

September 4, 1998.

Henry T. Drake, Wadesboro, NC, for plaintiffs.

Richard T. Rice, H. Grady Barnhill, Jr., Womble Carlyle Sandridge & Rice, Winston-Salem, NC, for defendant.

MEMORANDUM OPINION AND ORDER

ELIASON, United State Magistrate Judge.

This matter comes before the Court on plaintiffs' motion to remand the case back to state court. In conjunction therewith are two procedural matters—defendant's motion to strike plaintiffs' reply brief and defendant's motion for leave to file a supplemental memorandum.

Facts, Procedural History, and Contentions of the Parties

On February 9, 1998, plaintiffs, who are homeowners, filed a complaint in state court in Richmond County, North Carolina. They alleged that defendant committed nuisance and trespass against them through its operation of a quarry near their homes. The quarrying process allegedly creates excessive dust, flying rocks, noise, and blasting shocks. As a consequence, plaintiffs contended that their health, peace of mind, land, and homes have been damaged. In accordance with state law, plaintiffs listed their damages only as "in excess of $10,000." See n. 2, infra. They each sought an amount in excess of $10,000 for damage to their homes and property from the blasting shocks, an amount in excess of $10,000 for the trespass and nuisance created by the dust and rocks which land on their property, and an amount in excess of $10,000 in punitive damages. They also asked for an injunction to prevent defendant's continuing trespass and nuisance.

Subsequently, defendant removed the case to this Court pursuant to 28 U.S.C. § 1441, contending that the case met the requirements for diversity jurisdiction as set out in 28 U.S.C. § 1332. Plaintiffs countered by seeking remand back to state court. They do not dispute that the parties are of diverse citizenship as required by 28 U.S.C. § 1332(a). However, they argue that defendant fails to show the jurisdictional amount of $75,000 because, on the face of the complaint, they only seek damages of in excess of $30,000 each.

Defendant argues that in determining the jurisdictional amount, the Court may look beyond the dollar amount of damages sought by plaintiffs and may consider as well the amount which plaintiffs' injunction request, if granted, would cost defendant. In support of its assertion, defendant has supplied an affidavit from Rodney Hobbs, an Area Production Manager for defendant. He states that closing the quarry near plaintiffs' homes would deprive defendant of at least $4,862,000 per year in pretax earnings, that each lost hour of daily production would amount to an annual economic impact of more than $979,000, and that any restriction which measurably reduced defendant's output would have an annual economic impact on defendant in excess of $75,000. Plaintiffs reply that the Court should determine the amount in controversy only from plaintiffs' perspective and not consider the economic impact on defendant.¹

Discussion

The law used to determine jurisdictional amount in "diversity" cases is quite clear, up to a point. Federal courts "have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between citizens of different states." 28 U.S.C. § 1332(a). In addition, any matter which may have been originally brought in federal court, but is filed in a state court, may be removed by the defendant to federal district court. 28 U.S.C. § 1441.

In either a case originally filed in, or one removed to, federal court,

[t]he party seeking to invoke the jurisdiction of the federal courts has the burden of proving its existence by showing that it does not appear to a legal certainty that its claim is for less than the jurisdictional amount.

14A Charles Alan Wright, et al., Federal Practice and Procedure § 3702, at 19 (2d ed.1985). Accordingly, in a removal case, the defendant, rather than the plaintiff, has the burden of proving that the jurisdictional requirements for removal are met. Griffin v. Holmes, 843 F.Supp. 81 (E.D.N.C.1993) (citing Kirchner Gafford v. General Electric Co., 997 F.2d 150, 155 (6th Cir.1993)). For a removal, this means defendant must prove to a "legal certainty" that plaintiffs' claim exceeds $75,000. St. Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283, 289, 58 S.Ct. 586, 82 L.Ed. 845 (1938); Burns v. Windsor Ins. Co., 31 F.3d 1092, 1095 (11th Cir.1994). However, a plaintiff's right to select the forum for its claim is stronger that a defendant's right to remove. Therefore, any doubts about removal must be resolved in favor of remand. Griffin, 843 F.Supp. at 84; Burns, 31 F.3d at 1095. In this case, the jurisdictional dispute only involves the amount in controversy, and not diversity of citizenship.

The amount in controversy is normally determined from the face of the pleadings. St. Paul, 303 U.S. at 289-90, 293, 58 S.Ct. 586, 82 L.Ed. 845. In this case, no specific amount is alleged in the complaint. Therefore, it will not aid in determining whether the action meets the jurisdictional amount in controversy. This is because, under North Carolina pleading rules, in negligence actions, claims in excess of $10,000 may only so state.² That is how plaintiffs plead their demand for judgment.³

When federal jurisdiction is not plain from the face of a plaintiff's complaint, the defendant must offer evidence in support of its claim that the controversy satisfies the federal jurisdictional amount. The court makes its determination on the basis of the existing record. 14A Wright, supra, § 3725, at 417. This means pleadings, affidavits or other matters in the record. 14A Wright, supra, § 3702, at 26; 14A Wright, supra, § 3725, at 223 (Supp.1997).

In the instant case, plaintiffs' complaint only shows that the damages for each plaintiff exceeds $30,000. Defendant did not file a motion under Rule 8 of the North Carolina Rules of Civil Procedure in order to ascertain the exact amount in controversy as to each plaintiff. It, therefore, becomes incumbent on defendant to point to some evidence in the record or to submit independent evidence which would show that the plaintiffs' damage claims exceed $75,000. Defendant fails to do this. Instead, it submitted a supplemental brief, to which plaintiffs object,⁴ requesting that the Court combine all punitive damage demands and attribute the total demand to each plaintiff. However, defendant has failed to suggest an amount for the punitive damage award. Moreover, because punitive damages are discretionary, the Court would need substantial evidence before it would be willing to place a valuation on that kind of damage award. Consequently, the Court finds that defendant has failed to meet its burden of proof as to the amount of damages sought by plaintiffs. However, this does not end the matter because not only have plaintiffs sought money damages, but they also seek injunctive and declaratory relief.

In an action such as this one where plaintiffs seek injunctive or declaratory relief, "the amount in controversy is measured by the value of the object of the litigation." Hunt v. Washington State Apple Advertising Commission, 432 U.S. 333, 347, 97 S.Ct. 2434, 2443, 53 L.Ed.2d 383 (1977) (citations omitted). Some courts construe this to mean the value of the right to be enforced or protected. Ericsson GE Mobile Communications, Inc. v. Motorola Communications & Electronics, Inc., 120 F.3d 216, 219 (11th Cir.1997); Kheel v. Port of New York Authority, 457 F.2d 46, 49 (2d Cir.), cert. denied, 409 U.S. 983, 93 S.Ct. 324, 34 L.Ed.2d 248 (1972); Alfonso v. Hillsborough County Aviation Authority, 308 F.2d 724, 726 (5th Cir.1962); Seven-Up Company v. Blue Note, Inc., 260 F.2d 584, 585 (7th Cir.1958), cert. denied 359 U.S. 966, 79 S.Ct. 878, 3 L.Ed.2d 835 (1959).

There is basic agreement among the courts concerning what must be valued. The seemingly never ending source of confusion concerns how to value it. The Supreme Court itself has never made one clear, definitive statement on how to go about placing a monetary value on the "object of the litigation." Consequently, lower courts, when faced with the myriad of fact patterns which arise in diversity cases, have formulated a number of different valuation rules, each with indirect support from various Supreme Court opinions.

One such rule is known as the "plaintiff-viewpoint" rule. See generally 14A Wright, supra, § 3703. Courts applying this rule look only to the benefit to be gained by the plaintiff in order to find the amount in controversy.⁵ The main criticism of the plaintiff-viewpoint rule is that it is an imperfect way to realize the purpose behind the jurisdictional amount limit, which is to keep trivial cases out of the federal courts. 14A Wright, supra, § 3703, at 66-67. Unfortunately, the rule achieves this goal by also keeping out cases where great sums of money are involved on the part of the defendant, but not the plaintiff.

Courts which utilize the plaintiff-viewpoint rule are, of course, unable to cite to a Supreme Court decision that directly mandates it. Instead, they must rely on the case of Glenwood Light & Water Company v. Mutual Light, Heat, & Power Company, 239 U.S. 121, 36 S.Ct. 30, 60 L.Ed. 174 (1915), for support. However, that case is less than satisfactory for the purpose because of its unique fact situation.

In Glenwood, the town of Glenwood Springs, Colorado, had granted both parties the right to construct power plants and to supply the town with electricity. Defendant constructed its power lines so near to the pre-existing lines of the...